The dollar is gaining ground against the Japanese Yen on Tuesday, but is slightly weaker against its major European competitors. Economic data from the U.S. was largely positive Tuesday, particularly the retail sales data. Meanwhile, Japan’s current account data disappointed and U.K. inflation hit the Bank of England’s 2 percent target.
Fed tapering concerns have also resurfaced after Atlanta Federal Reserve President Dennis Lockhart said Monday that he supports “similar tapering steps” as the one taken to reduce bond-market purchases by $10 billion by the Federal Reserve last month, so long as the economic outlook remains positive.
Retail sales in the U.S. rose by slightly more than expected in the month of December, according to a report released by the Commerce Department on Tuesday, although the report also showed a notable downward revision to the sales growth seen in November.
The report said retail sales edged up by 0.2 percent in December compared to economist estimates for a 0.1 percent increase. At the same time, the Commerce Department said the retail sales growth in November was downwardly revised to 0.4 percent from the 0.7 percent originally reported.
After reporting notable decreases in U.S. import prices in each of the two previous months, the Labor Department released a report on Tuesday showing that import prices unexpectedly came in unchanged in December.
The Labor Department said import prices recorded no change in December following decreases of 0.9 percent in November and 0.6 percent in October. Economists had been expecting import prices to increase by about 0.4 percent.
The report also said export prices rose by 0.4 percent in December after edging up by 0.1 percent in November. Export prices had been expected to inch up by another 0.1 percent.
Business inventories in the U.S. rose by slightly more than expected in the month of November, according to a report released by the Commerce Department on Tuesday. The report said business inventories increased by 0.4 percent in November after rising by 0.8 percent in October. Economists had expected inventories to increase by 0.3 percent.
The dollar has rebounded from yesterday’s low of Y102.846 against the Japanese Yen, to around Y103.715 on Tuesday.
Japan posted a current account deficit of 592.8 billion yen in November, the Ministry of Finance said on Tuesday, sliding into the red for the second straight month. The headline figure was well shy of forecasts for a shortfall of 368.9 billion yen following the 127.9 billion yen deficit in October.
Overall bank lending in Japan was up 2.6 percent on year in December, the Bank of Japan said on Tuesday, standing at 411.449 trillion yen. That follows the 2.4 percent increase in November.
The greenback dipped to a low of $1.3698 against the Euro on Tuesday, but has since risen back to around $1.3675, nearly unchanged for the session.
Industrial production in the euro area staged a better-than-expected recovery in November, rising at the fastest pace in more than three years, and eased concerns over the sluggish pace of the recovery as well as boosted the outlook for the 18-nation economy.
Data published by the Eurostat on Tuesday showed that industrial output in the currency bloc advanced a seasonally adjusted 1.8 percent in November from a month earlier, after falling for two months in a row. The increase was the biggest since May 2010, when production grew 2 percent.
In October, production had recorded a 0.8 percent fall, which was revised up from 1.1 percent. Economists were looking a 1.4 percent growth for November.
The buck has retreated from yesterday’s high of $1.6346 against the pound sterling, to around $1.6450 on Tuesday.
U.K. inflation hit the Bank of England’s 2 percent target for the first time in more than four years in December, suggesting that prices were not bloated by robust economic recovery, official data showed Tuesday. Consumer prices rose 2 percent year-on-year, the slowest since November 2009, the Office for National Statistics said. The rate was forecast to remain stable at 2.1 percent.